TheWorks expecting to trade in line despite higher freight costs

Discount books, stationery and art supplies retailer TheWorks said on Friday that it had traded stronger than expected in the first half, with a two-year like-for-like sales increase over the pre-pandemic period of 14.5%, and total two-year sales growth of 17.9%.

The London-listed company said its trading result for the 26 weeks ended 31 October reflected the “increasing appeal” of its proposition, and the “strong progress” in implementing its strategy to make the business “better, not just bigger”.

Net cash at the end of the period totalled £17.8m, an increase of £17m over the period, positioning it “well” ahead of the peak holiday trading period.

TheWorks said that, through “proactive management” of the supply chain and, assuming that its strategies to secure the supply of stock continued to be successful, stock levels were expected to support Christmas sales.

Its board said it was expecting the full-year result for the 2022 financial year to be in line with its original expectations, despite incurring higher freight costs.

“It's clear from these results that our products resonated extremely well with customers during the pandemic, helping them to read, learn, play and craft through lockdown,” said chief executive officer Gavin Peck.

“Our strong sales in recent months demonstrate that demand has been maintained and customers continue to value our offer.

“It's particularly pleasing to see that whilst our online sales continue to run at almost double their pre-pandemic levels, store sales are also growing.”

Peck said that looking ahead, the firm had a “fantastic range” of products for Christmas, with initial demand for them already very strong.

“We are cautiously optimistic about prospects for our peak sales season and our ability to trade through the ongoing supply chain challenges faced by the majority of our sector.

“As we celebrate our 40th year, I am proud of the business that TheWorks has become and of our colleagues who work incredibly hard to delight our customers and support one another.”

At 0934 GMT, shares in TheWorks were down 3.05% at 55.26p.